Soigwa v Diversity Micro Credit Ltd & another (Commercial Case E1450 of 2025) [2026] SCC 64 (KLR)
The bottom line
#A Mombasa court declared a WhatsApp-served vehicle repossession notice illegal but ruled the borrower must still repay the loan.
What this practically means
#Executive summary
#Key legal issues
#Whether the Claimant defaulted on the loan
The Claimant admitted indebtedness and continued servicing the loan, so default/indebtedness was established despite disputed amounts
It was not disputed that the Claimant took a loan of Kshs. 280,000/- payable in 18 monthly installments. The Claimant admitted being indebted and having paid Kshs. 263,167/- to date. However, the exact outstanding sum could not be established due to glaring inconsistencies in the 1st Respondent's pleadings and oral testimony, which undermined the counterclaim though not the fact of indebtedness.
Whether the proclamation and intended repossession were unlawful
The proclamation dated 10th December 2025 was declared irregular/illegal for insufficient service and unsupported assessment, though the lender was entitled to realize the security
While Section 2(3)(e) of the Auctioneers Act empowered repossession upon default, the 2nd Respondent's process failed statutory standards: the vehicle was never physically inspected yet assessed, and service was effected via WhatsApp alone instead of personal service. The inconsistencies in the sums demanded also weighed against the creditor, creating an imbalance between creditor rights and debtor protection contrary to the Auctioneers Act and Rules.
Whether the Claimant is entitled to the reliefs sought
Partially: declaration granted, permanent injunction refused, nominal damages of Kshs. 30,000/- awarded against the 2nd Respondent instead of general damages
The proclamation notice breached Rule 12(1)(c) of the Auctioneer Rules, rendering any execution flawed. However, the permanent injunction failed because the debt persists. General damages were unavailable in what is essentially a contractual dispute per National Industrial Credit Bank Limited v Aquinas Francis Wasike & Another, so nominal damages were awarded for the inconvenience and irregular process.
Whether the 1st Respondent proved its counterclaim
Counterclaim dismissed for insufficient evidence
The 1st Respondent pleaded three different arrears figures (Kshs. 229,444.66, Kshs. 316,581.86 and Kshs. 344,200.88), testified to Kshs. 281,781/- in cross-examination, yet instructed recovery of Kshs. 300,035/-. No reconciliation or satisfactory explanation of the variance was tendered, and a liquidated claim must be strictly proved.
Legal principles established
#- Special damages and liquidated claims must be specifically pleaded and strictly proved
- General damages are not ordinarily recoverable in breach of contract cases
- Service of a proclamation notice through WhatsApp alone does not comply with the Auctioneers Act and Rules; personal service is required
Court orders
#- 1.The proclamation notice dated 10th December 2025 is rendered illegal on account of insufficient service upon the Claimant and unsupported assessment of the subject motor vehicle
- 2.The prayer for permanent injunction is disallowed
- 3.Judgment entered against the 2nd Respondent for nominal damages for irregular and unlawful proclamation in the sum of Kshs. 30,000/-
- 4.Parties to bear their own costs
- Jurisdiction invoked
- Original jurisdiction under the Small Claims Court Act over the statement of claim and counterclaim (not expressly cited in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Soigwa v Diversity Micro Credit Ltd & another (Commercial Case E1450 of 2025) [2026] SCC 64 (KLR)", Case Analysis (2026). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/scc/2026/64/eng@2026-05-04
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.